Conservatives commit to 20:1 pay ratio in public sector

Submitted by Kathryn Busby on 9 April 2010

Conservative Leader David Cameron writes in today's Guardian:

The government plays an important role in helping to shape society, so if we win the election we will set up a fair pay review to investigate pay inequality in the public sector.

Some of our most successful private sector companies operate a pay multiple, meaning that the highest paid person doesn't earn more than a certain multiple of the lowest paid. We will ask the review to consider how to introduce a pay multiple so that no public sector worker can earn over 20 times more than the lowest paid person in their organisation.

The Guardian quotes the Taxpayers' Alliance view that 223 public sector executives earn more than £211,000 ie. 20 times more than a minimum wage annual salary of £10,556. They report that among those unaffected would be the highest-paid police chief who earns £253,620 (11 times the lowest police salary of £22,680) and the governor of the Bank of England who earns £296,818 (19 times the lowest salary of £15,415).

The Equality Trust welcomes Conservative support for a maximum pay ratio within the public sector, while pointing out that change is most urgently needed in the private sector. We urge all parties to commit to constraining top incomes in both public and private sectors and establishing a living wage for all, in order to reduce income inequality and build a better society for everyone.